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Public Rulings (PRs)

Tax wording on wooden cubes with US dollar coins and bag.

Whilst waiting for new Public Rulings (PRs) to be issued and uploaded by the Inland Revenue Board (IRB) in their website in the year 2021, Baker Tilly has recap on the following PRs issued by the IRB towards the last 5 months of 2020:- 

Public Rulings Title Date of

Publication

Objectives & Selected Key Points
No. 5/2020

[click HERE]

Tax Treatment Of Research And Development Expenditure Part I – Qualifying Research And Development Activity 13.08.2020 To clarify the definition of research and development (R&D) and its qualifying criteria, to assist in determining whether an activity undertaken for R&D in the ordinary course of a business, qualifies as an R&D activity.

 

To explain the expenditure that qualifies for special deductions (incentive) in respect of a qualifying R&D activity.

 

The following are provided in these PRs:

 

  • Definitions of R&D, in-house R&D, approved research institute, R&D company, contract R&D company and approved research company
  • Explanations on incentives that can be claimed as a single deduction under subsection 34(7) or double deductions under sections 34A or 34B of Income Tax Act 1967 (ITA)
  • Various examples are given on whether the activities carried out for R&D fulfils the required criteria to qualify as R&D activity

 

Note: These PRs amends, rewrites and updates PR No. 5/2004 and the related 2008 addendum.

 

Both these PRs should be read together with the guidelines titled “Guidelines on The Application Procedure for A Special Deduction in Respect of A Qualifying Research and Development Activity”.

No. 6/2020

[click HERE]

Tax Treatment Of Research And Development Expenditure Part II – Special Deductions 13.08.2020
No. 7/2020

[click HERE]

Appeal Against An Assessment And Application For Relief 07.10.2020 To explain procedures on appeal and application for relief in line with the provisions of the ITA; and Form Q (filing of an appeal) & Form N (application for extension of time) appeal procedures.

 

The PR also provides comparison between an appeal and an application for relief.

 

Note: This PR replaces PR No. 12/2017.

No. 8/2020

[click HERE]

Taxation Of A Resident Individual Part I – Gifts Or Contributions And Allowable Deductions 09.10.2020 To explain gifts or contributions made by a resident individual that are allowable in determining the total income for a year of assessment (YA); and tax deductions (personal relief(s)) that are allowable to a resident individual in computing his chargeable income for a YA.

 

Besides various examples on the above, the PR also provides the list of medical equipment and special needs that qualify for deduction under the “medical treatment, special needs and carer expenses for parents” relief.

 

Note: This PR replaces PR No. 4/2018.

No. 9/2020

[click HERE]

Taxation Of Trusts 06.11.2020 To explain the taxation of trusts including the ascertainment of a trust beneficiary’s statutory income from the trust.

 

The PR explains that a trust is an arrangement created when there is a legal transfer of ownership by the owner of properties (settlor) to an appointed person (trustee) for the benefit of specified persons (beneficiaries).

 

The PR also provides the tax treatment of a trust body.

No. 10/2020

[click HERE]

Reinvestment Allowance Part I – Manufacturing Activity 06.11.2020 To assist a company resident in Malaysia which engages in manufacturing or agricultural and integrated activities in ascertaining its eligibility to claim reinvestment allowance (RA) and provide clarification in relation to projects and expenditures that qualify for RA, period of eligibility, computation of RA and limitation of maximum period to absorb RA balances.

 

Note: These PRs replace PR No. 9/2017 and PR No. 10/2017 respectively.

No. 11/2020

[click HERE]

Reinvestment Allowance Part II – Agricultural And Integrated Activities 10.11.2020
No. 12/2020

[click HERE]

Tax Incentive For Angel Investor 17.11.2020 To explain the tax incentive offered to an angel investor who has invested in an investee company.

 

An angel investor is a high net-worth individual who provides funding needed to start a business in exchange for share ownership in an investee company.

 

The PR explains the criteria that an angel investor would have to fulfil in order to qualify for tax exemption.

 

The PR also provides the differences between a venture capitalist and an angel investor.

 

Note: This PR replaces PR No. 11/2015.

*ABSS is pleased to be partnering with Baker Tilly, a globally recognised accounting and advisory firm that offers accounting, assurance, tax and advisory services.

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